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Streck, Inc. v. Ryan

United States District Court, D. Nebraska

July 11, 2018

STRECK, INC., Plaintiff,
v.
STEVEN RYAN, et al., Defendants.

          MEMORANDUM AND ORDER

          John M. Gerrard United States District Judge.

         The plaintiff in this case is Streck, Inc., a Nebraska corporation that manufactures clinical and research laboratory products. The defendants are Barry Uphoff, Steven Ryan ("Steven"), and Carol Ryan ("Carol"). Uphoff and Steven are former members of Streck's board of directors. Carol is the trustee of the irrevocable trust of Streck's founder, Dr. Wayne Ryan.

         Streck has sued the defendants for their alleged roles in forming a competing company called CFGenome. Each defendant has filed a partial motion to dismiss under Fed.R.Civ.P. 12(b)(6). Filing 16; filing 18; filing 20. For the reasons discussed below, Uphoff's and Steven's motions will be denied in their entirety. Carol's motion will be granted in part, and denied in part.

         BACKGROUND

         The plaintiff's allegations are briefly summarized as follows. Streck was founded by Dr. Wayne Ryan in 1982, and is now a "world leader in cell and biological sample stabilization technology." Filing 1 at 2. From its inception, Streck has managed its corporate affairs (at least in part) through its board of directors. Seefiling 1 at 2-3. According to Streck, members of its board receive "certain confidential information in order to assist in their decision-making responsibilities[.]" Filing 1 at 3.

         Uphoff was a member of Streck's board of directors from 2007 to 2015. Filing 1 at 5-6. Steven was a member from 2014 to 2016. Filing 1 at 5-6. By accepting those positions, Uphoff and Steven were allegedly "bound by explicit duties of confidentiality" which, pursuant to Streck's bylaws, prohibited them from disclosing the company's proprietary information. Filing 1 at 3. Uphoff and Steven were also required to "exercise a reasonable duty of care" to protect Streck's confidential information. Filing 1 at 3.

         According to Streck, Uphoff and Steven breached their duties of confidentiality in separate, yet related ways. Specifically, Streck alleges that Steven, throughout his tenure on the board, solicited (and received) confidential information regarding Streck's product groups, including its "blood collection tube business and sales." Filing 1 at 5-6. After 2 years of receiving that information, Steven allegedly resigned from the board and began working for Streck's competitor, CFGenome (which, as noted below, was started by Streck's original founder, Dr. Wayne Ryan). Filing 1 at 6. Steven is allegedly using Streck's proprietary information to benefit CFGenome and its employees. Filing 1 at 7.

         Streck's allegations against Uphoff relate more to the formation of CFGenome than its current operation. Streck claims that Uphoff, while a member of its board, was aware of Dr. Wayne Ryan's "secret" plan to create CFGenome to directly compete with Streck. Filing 1 at 8. Rather than informing the board of Dr. Ryan's intentions, Streck says that Uphoff "secretly assisted" Dr. Ryan and "encouraged" him to take certain actions that made CFGenome's formation possible. Filing 1 at 8.

         Streck has also sued Carol Ryan in her role as trustee of Dr. Wayne Ryan's irrevocable trust. Streck claims that Carol provided Uphoff and Steven 10, 000 shares of Streck stock as "compensation for their participation in the scheme to damage Streck[.]" Filing 1 at 10. Streck also alleges that Carol knew about, and participated in, Uphoff's and Steven's alleged conduct by (1) intentionally thwarting Streck's 2014 plan to sell the company; and (2) encouraging Dr. Ryan to form CFGenome. Filing 1 at 10.

         STANDARD OF REVIEW

         To survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. While the Court must accept as true all facts pleaded by the non-moving party and grant all reasonable inferences from the pleadings in favor of the non-moving party, Gallagher v. City of Clayton, 699 F.3d 1013, 1016 (8th Cir. 2012), a pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Iqbal, 556 U.S. at 678. Determining whether a complaint states a plausible claim for relief will require the reviewing court to draw on its judicial experience and common sense. Id. at 679.

         DISCUSSION

         Streck's complaint includes 5 separately-pled claims for relief: (1) breach of fiduciary duty (against all defendants); (2) breach of contract (against Steven and Uphoff only); (3) misappropriation of corporate opportunity (against all defendants); (4) intentional interference with prospective advantage (against Uphoff and Carol only); and (5) declaratory ...


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